This paper discusses activist fiscal policies during good times, the crisis period and for the post-crisis period. The study argues, first, that fiscal policies were overly imprudent during the boom phase preceding the crisis. This was due to excessive expenditure growth and problems with...

In a standard linear structural VAR framework we analyse the size and sign of fiscal multipliers in the euro area, using a newly available quarterly dataset of fiscal variables for the period 1981-2007. From a policy perspective, the analysis of fiscal multipliers in “average times” provides...